MINUTES OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session June 30, 1995 The Committee on Ways and Means was called to order at 8:28 a.m., on Friday, June 30, 1995, Chairman Marvel presiding, in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Morse Arberry, Jr., Chairman Mr. John W. Marvel, Chairman Mrs. Jan Evans, Vice Chairman Ms. Sandra Tiffany, Vice Chairman Mr. Dennis L. Allard Mrs. Maureen E. Brower Mrs. Vonne Chowning Mr. Jack D. Close Mr. Joseph E. Dini, Jr. Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. Bob Price Mr. Larry L. Spitler COMMITTEE MEMBERS ABSENT: None STAFF MEMBERS PRESENT: Mr. Mark Stevens, Fiscal Analyst Mr. Gary Ghiggeri, Deputy Fiscal Analyst Ms. Jeanne Botts, Program Analyst SENATE BILL 16 Increases compensation to Supreme Court justices and district judges. Chairman Marvel noted the committee had indicated it had additional questions about this bill. He stated the Legislative Counsel was in attendance to address those questions. Mrs. Evans stated there had been some concern about the percentage increase proposed for judges' salaries. A question had arisen regarding whether the judges' salaries could be raised incrementally rather than every six years. Ms. Brenda Erdoes, Legislative Counsel, explained judges' salaries could not be increased during their term of office. She explained a legal argument could be made for allowing incremental cost of living increases, which would keep the purchasing power of the dollar constant. Chairman Marvel asked if that action would be constitutional. Ms. Erdoes replied she believed it would be constitutional. Ms. Giunchigliani asked why longevity payments could be made to judges during their term of office. Ms. Erdoes responded longevity payments were considered separate from salary. SENATE BILL 406 Revises provisions governing organization of Department of Motor Vehicles and Public Safety. Mr. Jim Weller, Director, Department of Motor Vehicles and Public Safety, introduced Mr. Ray Sparks, Acting Deputy Director, and Mr. Frank Adams, Acting Chief of Administrative Services. Mr. Weller testified S.B. 406 would authorize internal reorganization of the department, but it should not be confused with the earlier proposal to split the department. The purpose of S.B. 406 was to allow the department the same operating flexibility as private business. Chairman Marvel asked Mr. Weller to highlight the main points of the bill. Mr. Adams testified passage of the bill would authorize the creation of an Office of Technical Services. Currently, each division utilizes separate automation systems. Management of those two systems would be combined into one office which would support the entire department. Additionally, the bill would authorize the creation of a Division of Records and Identification which would consolidate the criminal history repository, the Motor Vehicles records search function, and Public Safety records. Chairman Marvel questioned whether additional staffing would be required. Mr. Adams indicated the department currently has sufficient staff which would be consolidated to make better use of resources. Chairman Marvel inquired whether the consolidation would result in the ability to access more complete criminal history records. Mr. Adams replied this was the intent of the bill. Mr. Weller stated it was envisioned ultimately prison and court records would be tied into this system. Mr. Adams indicated it was also proposed that a training division be created within the Department of Motor Vehicles and Public Safety combining Police Officer Standards Training and the Law Enforcement Training Academy to provide in- service training, basic training, and continuing education training for law enforcement functions within the department. He noted criminal investigative responsibility of the Bureau of Enforcement would be transferred to the Division of Investigation to shift investigations from a criminal focus to a regulatory focus. Ms. Tiffany stated she was surprised to hear about this proposed consolidation of automation, since funding was allocated to the department for a business process reengineering (BPR) study to determine whether or not to consolidate the automation functions. She questioned how this proposal could be submitted prior to completion of that study. Mr. Adams explained a revision to the statute was required in the event the BPR study determined consolidation was necessary. Ms. Tiffany suggested the bill was presumptuous. Mr. Weller explained the department was attempting to consolidate management of automation services, not consolidate equipment. Mr. Sparks noted this proposal had been discussed previously with Ms. Tiffany and the Director of the Department of Information Services. Mr. Price inquired whether S.B. 406 would confer peace officer powers on auditors. Mr. Sparks responded as the result of budget closings three Investigator positions were moved from the Bureau of Enforcement to the Division of Investigation. Passage of S.B. 406 was necessary to implement the authority of those positions, whose function will be to pursue criminal investigations against segments of the auto industry regulated by the department. In 1997 the peace officer authority of the Investigator positions remaining in the Bureau of Enforcement will be eliminated and the focus of those positions will become strictly regulatory. Mr. Fettic asked what the Special Services Division proposed by the bill would be. Mr. Weller said the new division would encompass the Fire Marshal, two grants offices, the Emergency Management Office, and the Hearings Office. He noted establishment of the division had been authorized by the Interim Finance Committee. Mrs. Chowning asked for some assurance the Fire Marshal's Office would not be weakened by this action. Mr. Weller noted the Fire Marshal had worked with fire service agencies throughout the state. Those agencies were satisfied with the bill, as amended. The intent of the legislature was to strengthen the division and enable it so seek assistance from the Investigation Division in cases of arson. Ms. Tiffany suggested amending the bill to exclude the consolidation of the Motor Vehicles and Public Safety data processing. Mr. Weller stated that amendment would be contrary to the intent of the bill. Ms. Tiffany stated the intent of this portion of the bill was contrary to the Strategic Plan for Information Resources and Information Technology (SPIRIT). Mr. Weller said the department does not agree with all of the SPIRIT recommendations. He reiterated this proposal was an attempt to consolidate resources to use data processing staff as a unit based on need. Ms. Giunchigliani expressed agreement with Ms. Tiffany. She said the department's proposal flies in the face of the Legislature's approval of funding for a BPR. Mr. Weller reiterated he was requesting the flexibility to use department resources as the department deems best. He noted there was no additional expense associated with S.B. 406. Mr. Sparks added the department is seriously committed to the BPR, and did not intend to do anything which would frustrate the results of that study. This consolidation would in no way prejudice the department's ability to perform a thorough analysis and implement the resulting recommendations. Chairman Marvel asked for public testimony. Mr. Gary Wolff, Nevada Highway Patrol Association, expressed strong opposition to S.B. 406. He stated the Association's expectations of this legislation and the actual outcome were quite different. He noted concern with provisions to declassify the Chief and Assistant Chief positions and to provide the Assistant Chief with bumping rights. He agreed reorganization of the automation systems is unnecessary. He suggested delaying action on this legislation until the 1997 legislative session. Mr. Dave Wyble, President, State of Nevada Peace Officers Association (SNPOA), stated his organization strongly opposed S.B. 406, particularly with regard to the Bureau of Enforcement issue. Mr. Galen Mitchell stated he recently retired from the Bureau of Enforcement and was speaking on behalf of Bureau employees. He said Bureau employees were adamantly opposed to S.B. 406 due to its complexity. He indicated the bill was misleading regarding the amount of criminal investigations done by the Bureau of Enforcement. He noted the Washoe County District Attorney recommended that the Bureau maintain law enforcement capability in order to regulate the automotive industry. Mr. Jerry Hafen, Vice President, State of Nevada Peace Officers Association, stated S.B. 406 affects 27 peace officer positions whose function was proposed to be assumed by three positions. The bill would effectively remove the Bureau of Enforcement's ability to access criminal history records. He noted Investigators have not been encouraged to initiate criminal cases. Therefore, he refuted Mr. Adams' statement regarding the numbers of regulatory versus criminal cases. He suggested creation of an interim study committee to review this legislation. Ms. Giunchigliani asked if any amendments to S.B. 406 had been submitted by opposing parties. Mr. Wyble answered the bill had not been amended in the Senate. He proposed amending the bill prior to taking further action in the Assembly. Chairman Marvel noted the committee would have to review the proposed amendments before taking action on this bill. Mr. Weller stated with respect to the Bureau of Enforcement issue, administrative sanctions were stronger than criminal sanctions, so the department was moving its focus toward regulatory cases. ASSEMBLY BILL 571 Revises provisions governing operation of certain regional facilities for children. Chairman Marvel stated Assemblyman John Carpenter had requested the opportunity to appear before the committee. Assemblyman John Carpenter, District 33, explained he was appearing to ask the committee to reconsider its action on A.B. 571 for an appropriation to the new detention center in Elko. He said it would be beneficial to the state to fund a portion of the long-term detention facility where children could be placed in lieu of being sent to China Springs. Chairman Marvel asked how many youths from Elko were being placed in China Springs. Mr. Carpenter stated the number of placements from the Elko area was 10 to 12. Mr. Allard asked how the appropriation would be used. Mr. Carpenter responded after the detention facility was constructed by Elko and Eureka Counties, six to nine youths from the Elko region would not have to be placed in the Nevada Youth Training Center, so those beds would become available for use by the rest of the state. A.B. 571 requested an appropriation to Elko County to offset payments it would continue to make to China Springs. Chairman Marvel asked how the appropriation would be used. Mr. Carpenter answered the funds would be used to operate the long-term detention center. Chairman Marvel asked what the minimum amount which would be acceptable to Elko County was. Mr. Carpenter stated the minimum request would be for funding for one year, i.e., $125,000. Mrs. Brower noted the bill requested a one-time appropriation, but this project is a long-term obligation. Mr. Carpenter explained ongoing funding for all institutions would have to be dealt with in the 1997 legislative session. He noted Elko County urgently needed this funding now. Mr. Dini pointed out removing Elko youths from China Springs would mean the other counties which support China Springs would have to absorb the cost of those beds. He said the long-term decision to be made by the Legislature was whether to support a new institution or continue to support the existing institution. He suggested approval of A.B. 571 would undermine the operation of China Springs. Mr. Carpenter said he agreed there needed to be a long-term plan to resolve this issue. Mr. Dini questioned whether Elko County had coordinated with the Division of Child and Family Services in developing this detention facility. Mr. Carpenter stated he did not know the answer to the question. Mrs. Chowning asked how passage of A.B. 571 would affect the Division of Child and Family Services budget. Mr. Carpenter said six to nine beds would not be needed by youths from Elko and would be made available to youths from other areas of the state. Chairman Marvel stated the committee would take Mr. Carpenter's testimony under advisement. Mr. Carpenter reiterated this funding is urgently needed by Elko County. SENATE BILL 84 Increases compensation of various public officers. Mr. Bob Hadfield, Executive Director, Nevada Association of Counties (NACO), testified S.B. 84 contained the recommendations of the commission to review the salaries of certain elected officials established by the 1993 Legislature. He noted the commission originally recommended a 25 percent salary increase for county elected officials. That recommendation was reduced to 20 percent by NACO. He noted county elected officials have not received a salary increase for six years, which was common practice. The bill also provided for a 2 percent longevity payment, retaining the existing 20 percent cap. He urged favorable consideration of S.B. 84. Ms. Giunchigliani asked how longevity payments were made. Mr. Hadfield answered county elected officials could receive longevity pay after service of four years plus six months. At that time, the payment would equal 2 percent per year for those four years. He noted there was considerable turnover among county elected officials. Most county elected officials did not yet qualify for longevity pay. Mrs. Brower asked what the last percentage increase received by county elected officials was. Mr. Hadfield stated he did not recall that number. Mr. Hadfield noted the bill addressed different classifications of counties. He explained that classification was established several years ago, and over the years the classifications had shifted, causing percentage increases to vary in some counties. Mrs. Evans noted a fundamental flaw in dealing with salary increases was the long period of time between increases, creating high percentage increases. She suggested there was a need to develop a means of providing salary increases incrementally to avoid this situation in the future. Mr. Hadfield stated NACO shared Mrs. Evans' concern and would support any effort by the Legislature to develop a more effective system for addressing this issue. Mr. Dini inquired whether the counties had money to pay the proposed salary increases. Mr. Hadfield responded affirmatively. He said all county commissions supported this measure and indicated funding was available in the budgets. Ms. Giunchigliani inquired whether county commissioners received compensation in addition to their salary for serving on other boards, e.g., convention authorities or airport authorities. Mr. Hadfield said he was not aware that any counties provided additional compensation for serving on other boards but he would research the question. SENATE BILL 471 Revises provisions governing eligibility for coverage for long-term care under state plan for assistance to medically indigent. Mr. Bob Hadfield, Executive Director, Nevada Association of Counties (NACO), testified S.B. 471, as amended, would increase income limits for state support of the long-term care from $714 to $750 and provide a mechanism for obtaining state assistance for three counties which would have difficulty making the federal Medicaid match. In addition, this measure would allow counties to approach the Interim Finance Committee in the event they experience financial difficulties. Mr. Hadfield expressed appreciation for the Legislature's efforts in support of the counties. Mr. Chris Thompson, Chief, Health Care Financial Analysis Unit, Department of Human Resources, noted this bill would authorize transfers of $150,000 in Fiscal Year 1995 and $200,000 in Fiscal Year 1996 from the hospital tax and intergovernmental transfer account to the extent such funds are available from reserved and unobligated revenues. Ms. Tiffany asked if the reserve was sufficient to fund these transfers. Mr. Thompson stated approximately $1.5 million per year was set aside for contingencies. It was reasonable to assume the reserve would be sufficient barring major Medicaid program changes at the federal level. Ms. Tiffany questioned who would make the decision to transfer the funds. Mr. Thompson stated the transfer would be the responsibility of the Director of the Department of Human Resources in Fiscal Year 1995. In Fiscal Year 1996 the department would make a recommendation to the Interim Finance Committee, which would make the final determination. Mr. Close expressed the hope the interim study regarding indigent care would result in useful information about this problem. Mr. Dini asked what the consequences of not passing the bill would be. Mr. Thompson responded approximately $10 million per year in federal matching funds to the counties would be lost if one or more counties had to drop out of the program. MR. DINI MOVED DO PASS S.B. 471. MR. HETTRICK SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * SENATE BILL 576 Makes appropriation to trust fund for class-size reduction. Ms. Jeanne Botts, Program Analyst, Fiscal Analysis Division, explained S.B. 576 would provide financial support to the local school districts to continue the class- size reduction program over the coming biennium. Funding would be provided to maintain the pupil-teacher ratios of 16 to 1 in selected kindergartens considered at risk of failure and in first and second grades. In addition, $7.3 million is provided in the second year of the biennium to begin reducing the pupil-teacher ratio in third grade. She noted the bill provided the flexibility for school districts to use the $7.3 million earmarked for third grade to develop alternative plans for reducing pupil- teacher ratios in grades one, two, and three, or for programs to improve pupil achievement in grades one, two, and three. Ms. Botts stated the total appropriation would be approximately $27.8 million from the General Fund and $15.7 million from estate tax revenue in the first year of the biennium and $39 million from the General Fund and $16.6 million from estate taxes in the second year. Ms. Botts explained school districts would not receive funding without first filing a plan to reduce pupil-teacher ratios with the Department of Education. Ms. Botts said the bill would provide for continuation of the scholarship program for teacher education at the University of Nevada, Reno, and the University of Nevada, Las Vegas. The scholarship program would be funded with estate tax revenue. Ms. Giunchigliani asked why third grade class-size reduction would not become effective until 1996. Ms. Botts answered the Governor recommended funding class-size reduction for all third grade, beginning in the second year of the biennium at a cost of $21 million. The joint subcommittee approved $7.3 million for third grade class-size reduction in the second year. MR. DINI MOVED DO PASS S.B. 576. MRS. CHOWNING SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Chairman Marvel asked for a committee introduction of a bill making various appropriations from state General Fund. MR. DINI MOVED TO INTRODUCE A BILL MAKING VARIOUS APPROPRIATIONS FROM STATE GENERAL FUND. MR. HETTRICK SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MS. GIUNCHIGLIANI WAS ABSENT FOR THE VOTE. * * * * * SENATE BILL 577 Increases salaries for certain public employees. Mr. Stevens explained S.B. 577 was commonly referred to as the "classified pay bill." It would provide for a 5 percent salary increase for classified state employees in the first year of the biennium and a 3 percent salary increase in the second year of the biennium. Appropriations would be made from the General Fund and the Highway Fund to implement those increases, as appropriate. He noted salary increases for professional employees of the University and Community College System would be 4 percent in the first year of the biennium and 3 percent in the second year of the biennium. Salaries for uniformed Highway Patrol positions would be increased by two pay grades or approximately 9 percent. Chairman Marvel called for public testimony. Dr. Joe Crowley, President, University of Nevada, Reno, explained he was not testifying in opposition of S.B. 577. He commended the supporters of this legislation for the recognition extended to state classified employees. He noted this recommendation was richly deserved. He expressed disappointment, however, that university faculty staff was not extended the same recognition, since their performance had also been admirable over the past four years. He stated while he understood the decision to provide faculty staff with a lesser salary increase, he did not agree with it. Ms. Giunchigliani commented she was pleased the Senate had agreed to add 1 percent to the classified state employees' salary increase in the first year of the biennium. She noted teachers were also receiving a 4 percent increase in the first year of the biennium. MR. ARBERRY MOVED DO PASS S.B. 577. MS. TIFFANY SECONDED THE MOTION. THE MOTION WAS CARRIED. MRS. EVANS ABSTAINED. MR. SPITLER WAS ABSENT FOR THE VOTE. * * * * * SENATE BILL 579 Makes various appropriation from state General Fund and revises provisions concerning governmental financial administration. Ms. Holly Van Valkenburg testified she had been working with Esmeralda, Lincoln, and Nye Counties as a library consultant. She explained a portion of S.B. 579 would provide an appropriation of $250,000 to rural libraries. Ms. Giunchigliani asked if this appropriation would fund the bookmobile program in the rural counties. Ms. Van Valkenburg responded the bookmobile program was funded separately. Mr. Price questioned whether this appropriation had originally been requested in a separate bill. Ms. Van Valkenburg responded affirmatively. Senator William Raggio, Washoe County Senatorial District 3, testified S.B. 579 included appropriations for local projects approved by the Senate Finance Committee. The total General Fund appropriation would be $7.26 million in Fiscal Year 1996 and $107,000 in Fiscal Year 1997. In addition, the bill includes a Highway Fund appropriation of $620,000. He provided a brief explanation of each appropriation. He added the bill required a technical adjustment. Chairman Marvel indicated that adjustment had been noted by the committee. Mr. Price questioned why the appropriations had been included in one bill. Senator Raggio responded the Senate Finance Committee voted on each appropriation separately. Each was approved by a majority vote. It was the decision of the Senate Finance Committee the most simple means of processing these appropriations was to combine them in one bill, which also facilitated determining their total fiscal impact. He noted all of the local projects included in the bill were worthy of funding. Mr. Price said it was his understanding the National Automobile Museum was a nonprofit organization, and as such, was precluded from lobbying the Legislature for funding. Mr. Harvey Whittemore, member of the Board of Trustees of the Foundation of the National Automobile Museum, explained the appropriation requested in S.B. 579 would go to the City of Reno, not to the Automobile Museum. He explained the City of Reno owns the museum facility and the automobiles. The Foundation operates the museum. Ms. Giunchigliani expressed concern that local rather than statewide projects were being funded. Senator Raggio noted S.B. 579 dealt only with one-time appropriations to fund projects which are never addressed in the Executive Budget. He explained the members of the Legislature had a responsibility to represent the concerns of their constituents. Ms. Giunchigliani suggested local governments were the place where some of these local issues should be addressed. Mr. Whittemore said the National Automobile Museum is a national treasure which is important to the whole state. MR. DINI MOVED AMEND AND DO PASS S.B. 579. MR. FETTIC SECONDED THE MOTION. THE MOTION CARRIED. MR. CLOSE, MRS. BROWER, MRS. EVANS, MS. GIUNCHIGLIANI, AND MR. PRICE WERE OPPOSED. * * * * * ASSEMBLY BILL 282 Authorizes preference for underutilized businesses in public works and in state and local government purchasing. Assemblyman Morse Arberry, Jr., District 7, testified in support of A.B. 282. He explained the bill would authorize certain preferences for underutilized businesses, i.e., businesses owned and managed by women, members of racial or ethnic minorities, members of classes which have been discriminated against, or economically disadvantaged individuals. He noted this bill did not represent a mandate, but rather expressed a philosophy. If the state or local government desires to authorize this preference, a study must be conducted to determine whether there is a statistically significant disparity between the number of underutilized businesses qualified to perform a contract and the number of contracts awarded to such businesses. Mr. Allard asked the purpose of this bill. Mr. Arberry responded the bill was an attempt to evaluate underutilized businesses. Mrs. Chowning asked if the fiscal note on the bill had been revised. Mr. Arberry stated there was no longer a fiscal impact associated with this legislation, as amended. Mr. Close questioned how the study would be accomplished. Mr. Arberry responded the local government would hire a consultant to evaluate its contracts to determine if businesses were being underutilized. Mr. Close asked the cost of such a study. Mr. Arberry stated he was aware of a study commissioned by Nevada Power at a cost of approximately $2 million. He reiterated A.B. 282 is not a mandate. Mr. Dini questioned how the Purchasing Division could perform a study if no funding was allocated for the cost of the study. Mr. Arberry said if the Purchasing Division elected to conduct a study, it would have to approach the Legislature for funding. Ms. Giunchigliani asked which local governments did not have a policy for dealing with underutilized businesses. Mr. Arberry stated he was only familiar with Clark County policies. He noted Clark County addressed this issue within the past few years and was currently implementing the recommendations of the study. Mr. Price noted the United States Supreme Court had recently issued a decision which would have a major impact on minority preference issues. He questioned whether this decision would impact this legislation. Mr. Arberry stated he was not familiar with the Supreme Court decision. Mr. Allard asked what the results of the Clark County study were. Senator Joe Neal, District 4, explained Clark County and other local governments in southern Nevada conducted a disparity study to establish whether problems existed which could be addressed by an affirmative action program. ASSEMBLY BILL 738 Authorizes and provides funding for certain projects of capital improvements. Chairman Marvel noted the committee had heard the report of the Capital Improvements Subcommittee previously. MR. DINI MOVED DO PASS A.B. 738. MS. TIFFANY SECONDED THE MOTION. THE MOTION CARRIED. MRS. BROWER, MR. CLOSE, MS. GIUNCHIGLIANI, AND MS. TIFFANY WERE OPPOSED. MR. SPITLER WAS ABSENT FOR THE VOTE. * * * * * ASSEMBLY BILL 631 Revises distribution of revenue received from lease of federal land. Mr. Stevens noted Legislative Counsel recently rendered an opinion concerning the use of mineral land lease funds. Currently the law requires the first $10 million in mineral land lease payments from the federal government be deposited to the Distributive School Account. Amounts received in excess of $10 million are distributed 25 percent to the Distributive School Account, 50 percent to the counties (25 percent of which is for the support of school districts), and 25 percent to the Department of Business and Industry for allocation of grants to various entities. He noted the $10 million cap had never been reached. In order to comply with federal requirements, some of the funds had to be distributed to the local governments. Mr. Stevens stated an amendment to A.B. 631 was proposed to direct some of the mineral land lease funds to local governments by reducing the cap from $10 million to $7 million. He explained for the past six or seven years the state had received at least $7 million from this revenue source. Funds in excess of the $7 million would be distributed 25 percent to the Distributive School Account and 75 percent to the counties (of which 25 percent would be directed to local school districts). Chairman Marvel asked what the state's potential liability was in this matter and why the adjustments were required. Ms. Brenda Erdoes, Legislative Counsel, reported there is no case construing the particular federal statute which applies in this instance; however, a case which construes the grant in lieu of taxes provision of this statute established a requirement for the state to use the funds to mitigate the impact on the counties of the mineral land leases, not only for schools but for other impacts at the counties' discretion. The problem with the current statute is that the federal lease funds are received in a different proportion than they are distributed to counties through the Distributive School Account. Ms. Erdoes noted the current statute had been in effect for 10 years following the case cited without any consequence. She could not say with any guarantee there would be a consequence to leaving the statute in its current form. The worst case scenario would be that someone would file a lawsuit and allocations to the Distributive School Account currently provided for in the budget would have to be revised. Chairman Marvel asked if any other states had been sued. Ms. Erdoes replied other states had not been sued under this statute. South Dakota was sued under the provisions of a similar statute. Chairman Marvel asked the level of risk of not passing A.B. 631. Ms. Erdoes reiterated the South Dakota case is 10 years old and the statute has survived without challenge. She stated the committee could weigh the potential risk of a challenge. She suggested there was a good chance a challenge would be successful. Mr. Close asked how the Department of Business and Industry would be impacted by elimination of its share of these funds. Mr. Stevens noted the funds had never exceeded $10 million. Therefore, no distribution had ever been made to the Department of Business and Industry. Mr. Allard questioned whether a suit could be brought for retroactive damages. Ms. Erdoes responded the Legislature would argue for prospective damages, but she could not guarantee what position the court would take. There is no restriction on the court to take whatever action it deems fair pursuant to the facts of the case. Ms. Giunchigliani asked the rationale for changing the 50 percent distribution to the counties to 75 percent. Ms. Erdoes replied the purpose was to distribute more money to the counties. Ms. Giunchigliani asked what the fiscal impact of reducing the cap to $7 million would be on the Distributive School Account. Mr. Stevens said the fiscal impact would be approximately $400,000 in the second year of the biennium, when the revision would take effect. He noted this impact was calculated in the budget. Mr. Dini asked if Assemblyman Neighbors would be proposing an amendment requiring that all funds be directed to the counties. Mr. Stevens stated Mr. Neighbors indicated he would like to phase in funding to the counties over time. At this point, this legislation was deemed a sufficient attempt to distribute funds to the counties and to bring the statute into compliance with federal law. Ms. Giunchigliani expressed concern that revising the statute could be construed as an admission of noncompliance with federal law which could weaken the state's position. Ms. Erdoes said in her opinion revising the statute would not weaken the state's case. In fact, it would reflect a good faith attempt to distribute more money to the counties in compliance with federal law. MR. ARBERRY MOVED AMEND AND DO PASS A.B. 631. MR. DINI SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MRS. EVANS WAS ABSENT FOR THE VOTE. * * * * * Chairman Marvel called for a recess at 11:00 a.m. The committee reconvened at 1:45 p.m. SENATE BILL 84 Increases compensation of various public officers. Chairman Marvel noted the committee had heard this bill previously. He asked if there was any further discussion. MR. DINI MOVED DO PASS S.B. 84. MR. ALLARD SECONDED THE MOTION. THE MOTION CARRIED. MRS. EVANS AND MS. GIUNCHIGLIANI WERE OPPOSED. MRS. CHOWNING, MR. PRICE, MR. SPITLER, AND MS. TIFFANY WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 274 Makes appropriation to Lincoln County School District for increased costs of construction of elementary school in Alamo. Senator Mike McGinness, Central Nevada Senatorial District, testified S.B. 274 was requested on behalf of Lincoln County School District to supplement operating funds for a new school. He explained Lincoln County is one of several counties which is experiencing financial difficulties, and it is barely able to meet its day-to- day needs. Ms. Giunchigliani asked if additional revenue in the Distributive School Account would be sufficient to supplement school operating funds. Senator McGinness explained a portion of the funding requested would be used to pay off a short-term loan and construction costs of the new school. Ms. Giunchigliani noted this action would set a precedent which was constitutionally questionable. Senator McGinness agreed this would set a dangerous precedent. He noted issues regarding unequal education and unequal opportunity were addressed in the Senate Finance Committee. The Senate Finance Committee determined to send a letter of intent to Lincoln County explaining the uniqueness of this appropriation. Mr. Dini noted a similar appropriation was made to Lincoln County in the late 1970s or early 1980s. He pointed out the Lincoln County tax base was not adequate to support the school district. Assemblyman Roy Neighbors, District 36, added Lincoln County had been benefitting from statutes exempting for profit businesses from taxes. That issue is currently in litigation, and proceeds which formerly went to Lincoln County were being withheld pending the outcome of that litigation. Mr. Allard noted a separate appropriation of $34 million for textbooks and repairs had been approved by the Legislature. He agreed it was dangerous to establish a precedent for funding school construction from the state level. Mr. Hettrick stated he appreciated Mr. Allard's concern. He noted there are so few students in Lincoln County the distribution of the $34 million from the Distributive School Account would be minimal and not sufficient to offset operating costs and the outstanding loan payment. Senator McGinness confirmed Mr. Hettrick's statements. MR. DINI MOVED DO PASS S.B. 274. MR. HETTRICK SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. PRICE AND MS. TIFFANY WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 444 Makes contingent appropriation to Mineral County School District for portion of costs of construction of school to replace Shurz School. Senator McGinness testified the school in Shurz has been condemned for a number of years. Over the past few years, the tribe had attempted unsuccessfully to generate tax revenue to construct a new school. He noted this was a contentious issue between Shurz and Mineral County due to the perception that the tribe pays no property taxes. Senator McGinness pointed out this appropriation was contingent upon Mineral County obtaining public or private money to cover the balance of construction costs. Senator Reid is attempting to get federal funding. The tribe has contributed approximately $600,000. Chairman Marvel asked if the state could incur any liability associated with this appropriation. Senator McGinness said the tribe has considered filing an unequal education lawsuit. He suggested the state is currently in a vulnerable position. MRS. EVANS MOVED DO PASS S.B. 444. MRS. CHOWNING SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. PRICE AND MS. TIFFANY WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 430 Revises provisions governing regulation of emergency medical services in certain counties. Senator Bernice Mathews, Washoe County Senatorial District 1, testified four years ago Washoe and Clark Counties separated from the Health Division emergency medical services program. Washoe County has found the separation to be unsuccessful, and is again seeking state oversight for emergency medical services. She noted there would be a fiscal impact of $197,421 in the first year of the biennium and $160,060 in the second year. Mr. Close asked what the responsibilities of the state would be in overseeing this program. Senator Mathews responded the state would assume responsibility for certification and regulation. She explained the benefit would be that emergency medical technicians certified under a state program could practice throughout the state rather than be limited to practicing in Washoe County. Mr. Sam McMullen, representing Washoe County, noted the program was originally shifted to Washoe County by operation of a population determinant pursuant to statute. No additional funding was provided to Washoe County to support this program. Mr. Spitler asked if the fiscal impact would be offset by licensing fee revenue. Senator Mathews answered there would be no offset from licensing fee revenue. Ms. Giunchigliani noted an interim study committee would be addressing this issue. MR. ALLARD MOVED DO PASS S.B. 430. MR. SPITLER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. PRICE AND MS. TIFFANY WERE ABSENT FOR THE VOTE. * * * * * ASSEMBLY BILL 565 Revises provisions governing granting of probation or parole to person convicted of harassment, stalking or crime constituting domestic violence. Chairman Marvel noted there were some technical problems with A.B. 565, and no action would be taken at this hearing. SENATE BILL 405 Provides for establishment of family resource centers in certain neighborhoods to provide and administer social services. Chairman Marvel waived testimony on S.B. 405. MR. DINI MOVED DO PASS S.B. 405. MR. ARBERRY SECONDED THE MOTION. THE MOTION CARRIED. MRS. BROWER AND MR. CLOSE WERE OPPOSED. MRS. CHOWNING, MS. GIUNCHIGLIANI, MR. PRICE AND MS. TIFFANY WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 574 Authorizes expenditures by agencies of state government. Mr. Stevens explained S.B. 574 is the Authorizations Act. It is the companion measure to the Appropriations Act. He noted traditionally the Authorizations Act includes an appropriation to the Gaming Control Board. He said most of the language contained in S.B. 574 was traditional language with the exceptions of Sections 14 through 17 relating to the Insurance Advocate, which was eliminated in budget closings. Ms. Giunchigliani inquired whether funding for the State Climatologist was included in this bill. Mr. Stevens responded funding for the State Climatologist was inadvertently left out of this bill but would be included in a separate bill being heard in the Senate Finance Committee. MR. FETTIC MOVED DO PASS S.B. 574. MR. ALLARD SECONDED THE MOTION. THE MOTION CARRIED. MRS. CHOWNING, MR. PRICE, MR. SPITLER, AND MS. TIFFANY WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 16 Increases compensation to Supreme Court justices and district judges. Mrs. Brower said she is not against increasing judges' salaries, but she thinks a 26 percent increase is too high. Ms. Giunchigliani agreed with Mrs. Brower. MR. DINI MOVED DO PASS S.B. 16. MR. HETTRICK SECONDED THE MOTION. THE MOTION CARRIED. MRS. BROWER, MRS. CHOWNING, MR. CLOSE, MRS. EVANS, MS. GIUNCHIGLIANI, AND MR. SPITLER WERE OPPOSED. * * * * * Mrs. Evans suggested requesting the Legislative Commission to appoint a subcommittee to review issues related to compensation, longevity pay, pensions, etc. MRS. EVANS MOVED TO REQUEST THE LEGISLATIVE COMMISSION TO APPOINT A SUBCOMMITTEE TO REVIEW ISSUES RELATED TO COMPENSATION FOR PUBLIC OFFICIALS. MR. CLOSE SECONDED THE MOTION. Ms. Giunchigliani noted an interim study committee had already reviewed these issues. THE MOTION CARRIED. MS. GIUNCHIGLIANI WAS OPPOSED. * * * * * Chairman Marvel requested a committee introduction. Mr. Arberry explained this bill would increase compensation for legislators. He noted it was the result of recommendations made by Common Cause. MR. PRICE MOVED TO INTRODUCE A BILL TO INCREASE COMPENSATION FOR LEGISLATORS. MR. ARBERRY SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * ASSEMBLY BILL 736 Establishes maximum allowed salaries for employees in unclassified service of state. Chairman Marvel asked if any members had recommendations regarding this bill before the committee took action. Mr. Dini asked if a Hearings Officer position for the Department of Transportation was missing from the bill. Mr. Stevens stated a Hearings Officer transferred between the Department of Motor Vehicles and the Department of Transportation. Funding for that position could be handled outside this bill, but if this bill were to be amended, staff would recommend adding the position as part of the amendment. Mr. Dini inquired whether discrepancies in salaries for the Assistant Staff Counsel in the Consumer Advocate's Office had been corrected. Mr. Stevens answered affirmatively. Mr. Dini inquired about positions in the Division of Child and Family Services. Mr. Stevens stated there was a recommendation to upgrade the supervisor of the Nevada Youth Training Center and Youth Parole to Deputy Administrator. He noted the upgrade would require revision to the statutes to allow the Administrator of the division to appoint three Deputy Administrators rather than two. Mr. Dini recommended paying the Governor's Chief of Staff the same salary as other administrators, i.e., $80,950. MR. DINI MOVED AMEND AND DO PASS A.B. 736 TO INCLUDE THE REVISIONS NOTED. MRS. EVANS SECONDED THE MOTION. Mrs. Evans stated the Assistant Attorney General reported there were errors in the salaries of some positions in the Attorney General's Office. Chairman Marvel stated technical adjustments could be made in the Senate. Mr. Price asked that the motion be amended to increase the salary of the Administrator of the Office for Hospital Patients by $2,000. MR. DINI AMENDED THE MOTION PURSUANT TO MR. PRICE'S REQUEST. MRS. EVANS SECONDED THE AMENDED MOTION. Mr. Close expressed opposition to A.B. 736 since it included inconsistencies in compensation for similar jobs. Ms. Giunchigliani stated she could not support A.B. 736 because it sent a message to classified state employees they are less valuable than unclassified employees. THE AMENDED MOTION CARRIED. MRS. BROWER, MR. CLOSE, MR. FETTIC, AND MS. GIUNCHIGLIANI WERE OPPOSED. * * * * * ASSEMBLY BILL 175 Requires attendance in kindergarten for children of certain age. Ms. Giunchigliani asked the committee to consider A.B. 175. She suggested amending the bill to provide for multiplying the basic support guarantee per pupil by six-tenths and to make the effective date July 1, 1997, which would eliminate the fiscal note. The 1997 Legislature would have to appropriate funding in the 1997-99 budget. MS. GIUNCHIGLIANI MOVED AMEND WITHOUT RECOMMENDATION A.B. 175. MR. PRICE SECONDED THE MOTION. THE MOTION CARRIED. MR. ALLARD, MR. FETTIC, MR. HETTRICK, AND CHAIRMAN MARVEL WERE OPPOSED. MR. SPITLER AND MS. TIFFANY WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 218 Makes appropriations from state Highway Fund for use by Department of Motor Vehicles and Public Safety for business process reengineering study and revision of existing motor vehicle operating applications. Mr. Stevens stated requests for funding for business process reengineering (BPR) studies for the Department of Business and Industry and prisons would be amended into legislation currently pending in the Senate Finance Committee. Mr. Stevens noted S.B. 218 addressed the BPR for the Department of Motor Vehicles. He indicated the subcommittee had made recommendations to require that equipment is not purchased prior to completion of the BPR. Ms. Giunchigliani stated the amount of the appropriation should be amended from $935,388 to $595,000 to be allocated to the BPR, with the remaining balance to be held in reserve for equipment expenditures to be approved by the Interim Finance Committee. Mrs. Chowning expressed concern this bill would hamper the department from moving forward with its five-point plan. Mr. Stevens said the BPR had to be accomplished before the department could continue with the next stage of the project, i.e., equipment acquisition, computer programming, etc. MS. GIUNCHIGLIANI MOVED AMEND AND DO PASS S.B. 218. MR. HETTRICK SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MS. TIFFANY WAS ABSENT FOR THE VOTE. * * * * * Chairman Marvel called for a recess at 2:20 p.m. The committee reconvened at 6:53 p.m. ASSEMBLY BILL 282 Authorizes preference for underutilized businesses in public works and in state and local government purchasing. Chairman Marvel asked the pleasure of the committee. MR. ARBERRY MOVED DO PASS A.B. 282. MRS. CHOWNING SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. ALLARD, MRS. BROWER, MR. DINI, MR. HETTRICK, MR. SPITLER, AND MS. TIFFANY WERE ABSENT FOR THE VOTE. ASSEMBLY BILL 740 Increases number of Deputy Administrators in Division of Child and Family Services of Department of Human Resources. Mr. Stevens noted this issue had been addressed previously in this hearing as a possible amendment to the unclassified pay bill. The Bill Drafters indicated it was not appropriate to include this matter in the unclassified pay bill. Therefore, a separate bill was drafted. It would allow the Administrator of the Division of Child and Family Services to appoint three deputies rather than two. MR. HETTRICK MOVED DO PASS A.B. 740. MRS. CHOWNING SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. DINI AND MR. SPITLER WERE ABSENT FOR THE VOTE. * * * * * ASSEMBLY BILL 741 Makes various appropriations from state General Fund. Mr. Stevens explained A.B. 741 would authorize four appropriations to the Health Division for an obstetrical access pilot program, to the Canyon General Improvement District to repair flood damages, to Clark County School District for a pilot program for the supervision of pupils before and after school, and to Clark County School District for a pilot program for the instruction of those pupils whose primary language is not English. MR. ARBERRY MOVED DO PASS A.B. 741. MRS. CHOWNING SECONDED THE MOTION. THE MOTION CARRIED. MS. GIUNCHIGLIANI WAS OPPOSED. MR. DINI AND MR. SPITLER WERE ABSENT FOR THE VOTE. * * * * * ASSEMBLY BILL 739 Increases compensation of legislators. Chairman Marvel explained a subcommittee comprised of Mrs. Evans and Mr. Close had worked with the Nevada Taxpayers Association on this issue. Ms. Carole Vilardo, Nevada Taxpayers Association, expressed support for increasing salaries for Legislators. She explained A.B. 739 parallels the recommendations of the salary commission. She noted the Nevada Taxpayers Association was not in agreement with the percentage increases recommended. The Nevada Taxpayers Association suggested a 25 percent increase would be reasonable for legislators since there had been no increase since 1986. She suggested legislative salaries needed to be sufficient to attract qualified people to serve. Ms. Vilardo also suggested including provision for cost of living increases in this bill. Ms. Vilardo expressed objection to a proposed monthly allowance of $350 as reimbursement for miscellaneous costs during the interim. She suggested $100 per month would be a more reasonable amount. Ms. Giunchigliani stated she also objected to $350 per month. Ms. Giunchigliani suggested tying legislators' salaries to the Consumer Price Index and imposing a cap. Ms. Vilardo expressed opposition to altering legislative pensions. Mr. Arberry asked Ms. Vilardo if she objected to revising vesting requirements from ten years to five years within the Legislators Retirement System. Ms. Vilardo stated she had no objection to that provision. She said her objection was to revising the amount of legislative pensions, which remains a politically sensitive issue. Mrs. Evans recommended revising the bill to eliminate references to pensions and to allow for a one-time increase to $150 per day, after which increases would be based on the Consumer Price Index, not to exceed 4 percent. MS. GIUNCHIGLIANI MOVED AMEND AND DO PASS A.B. 739. MR. HETTRICK SECONDED THE MOTION. THE MOTION CARRIED. MR. ALLARD WAS OPPOSED. MR. DINI, MR. SPITLER, AND MS. TIFFANY WERE ABSENT FOR THE VOTE. * * * * * SENATE BILL 490 Expands definition of "manufactured home" for purposes of various provisions of Nevada Revised Statutes and as used in Sales and Use Tax Act. Mr. Charlie Joerg, representing Nevada Manufactured Housing Association, testified in 1987 the Legislature passed legislation exempting 40 percent of the cost of a manufactured home from sales and use tax. The exemption was approved by a vote of the people in 1988. He explained that measure included manufactured homes as defined in NRS 489.113 (i.e., manufactured homes built to Housing and Urban Development code specifications) but excluded manufactured homes built to Uniform Building Code specifications (NRS Chapter 461). It was not the intent of the Legislature to differentiate between the two types of homes. S.B. 490 was an attempt to correct that mistake. Chairman Marvel asked when this change would become effective. Mr. Joerg responded the effective date would be October 1, 1995. The fiscal impact is approximately $174,000 per year. Mr. Joerg noted this was an issue of equity. Ms. Janice Wright, Department of Taxation, concurred the potential loss of tax revenue to the state would be as reflected in the fiscal note. Ms. Vilardo expressed support for S.B. 490. MS. GIUNCHIGLIANI MOVED DO PASS S.B. 490. MR. HETTRICK SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MR. DINI AND MR. SPITLER WERE ABSENT FOR THE VOTE. There being no further business, the meeting was adjourned at 7:18 p.m. RESPECTFULLY SUBMITTED: Dale Gray, Committee Secretary Assembly Committee on Ways and Means June 30, 1995 Page